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How Does Copay Affect your Health Cover?

By Chanel Rick - May 26,2022
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Imagine this, 

After months of contemplating between health insurance policies and their features, you finally settled on one that suits you best. When presented with the premium liable to pay, you’re shocked to see the amount! For your current financial condition, this price is far too high. Though, you still need those benefits and coverages. What do you do? 

  1. Opt for Co-pay
  2. Pay the whole premium 

If you selected option A, you pay a lower premium rate. Why? Because co-pay means you agree to bear part of the medical expenses. The higher co-pay you settle on, the lesser premium you pay. If you chose option B, congratulations! You can easily claim cashless treatment facilities at the nearest network hospital without any financial strains. 

Understanding Co-pay in Health Insurance 

As mentioned above, most insurance providers offer co-pay clauses to customers who prefer paying a lower premium. You agree to shoulder a fixed percentage of the total bill, and the insurer will cover the rest. One of the reasons insurance companies offer this option is to deter customers from making unnecessary claims. 

Due to some reasons, you may consider opting for co-pay on your health insurance policy. Before doing so, understand the various co-pay clauses out there. 

  1. Pre-Existing Conditions Clause: Since treatments for such illnesses are expensive, the insurer will levy a co-pay clause 
  2. Age Clause: Policies for senior citizens usually contain a co-pay clause due to their age exposing them to higher health risks and expensive treatments 
  3. Location Clause: Those in tier 1 metro cities are likely to incur co-pay clauses to bear part of the expenses for medical treatment 
  4. Hospital Clause: If you opt for treatment at a non-network hospital, then the insurer may levy a co-pay clause 

With so many different clauses affecting your health insurance experience, you might wonder about the extent of its impact. While co-pay gives you the advantage of reduced premium, its other aspects might outweigh them. 

5 Major Effects of Co-pay on Health Insurance

When considering the option of co-pay, you must envision the larger picture of how it might affect your health insurance. Depending on the extent of its influence, make your decision wisely. Remember, despite the lower premium, pricey treatment could prove heavier to bear. 

1. Lowered Premiums

In exchange for the reduced premium, insurance companies levy a co-pay clause. Though, this clause and the percentage liable for you to pay depends on the plan selected. Co-pay is levied on expenses like lab tests, medicines, doctor visits, hospitalisation costs, etc. 

2. Treatment Costs 

You might incur hefty medical bills during a medical emergency. As per the percentage of co-pay applicable to you, the monetary strain of these expenses could wipe out the benefits of the occasionally charged lowered premiums. 

3. Higher Percentage for Senior Citizens 

While opting for a family floater plan or purchasing policies for ageing individuals, insurers may charge higher co-pay percentages. It’s due to the likelihood of frequent claims that often lead to expensive medical treatments and facilities. 

If you reside in tier 1 or metro cities, insurance providers will apply a higher co-pay in your case. Major cities have expensive healthcare facilities, and insurers may be less likely to shoulder the brunt of such bills. 

4. Coverage Requirements 

It’s highly unadvisable to purchase health insurance plans with co-pay without thoroughly evaluating your coverage needs. The policy must address your healthcare requirements, especially if it’s a family floater plan with older individuals or maternity cover. 

However, bear in mind that unforeseen medical expenses could cause these policies to become less efficient. 

5. Other Factors 

Before buying a policy with co-pay clauses, ensure to save sufficiently for sudden hospitalisation and other expenses. Additionally, consider factors like the claim settlement process (CSP), claim settlement ratio (CSR), inclusions and exclusions, and value-added services (VAS). 

Even if you’re fit and sound at the moment, you never know when an urgent medical need might arise. When choosing health insurance, carefully evaluate what’s more likely to disturb your finances – a higher premium or unforeseen medical bills. 


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